--- title: How Investors Should React to the Greek Crisis description: Your retirement accounts probably hold at least some Europeans stocks, but very few are probably Greek companies. authors: - name: Susie Poppick url: https://money.com/author/susie-poppick/ at_money_since: 2013 articles: 117 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Personal Finance - Retirement - Shopping - Taxes - Technology social: - https://x.com/susiepoppick former_staff: true published: '2015-07-01T19:10:03.000Z' modified: '2024-04-16T06:07:56.000Z' section: Economy and Politics tags: - funds - Greece - Investing - Retirement - stocks word_count: 555 canonical: https://money.com/greece-greek-crisis-investor-response/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![150701_INV_WhatGreeceMeans](https://img.money.com/2015/07/150701_inv_whatgreecemeans.jpg) *The Greek economic crisis isn't ending anytime soon.* Even from afar, it's hard for U.S. investors to ignore the Greek economic crisis, which continues to roil [global markets](http://www.wsj.com/articles/u-s-stocks-advance-on-greece-bailout-proposal-1435753772). After Greece saw its bailout funds expire Tuesday—and became the first developed country to fail to pay back a loan from the International Monetary Fund—Greek prime minister Alexis Tsipras sent a [letter](http://money.cnn.com/2015/07/01/news/economy/greece-prime-minister-letter-bailout-concessions/index.html?iid=EL) offering concessions to European creditors in hopes that a new agreement might help the country remain afloat. The fate of the Greek economy depends in large part on whether its government can quickly make a deal with European leaders. One point of tension: Leaders in Germany, Greece's [biggest creditor](http://www.bbc.com/news/world-europe-33325886), are insisting that the country accept additional austerity measures like pension cuts before it can get more emergency funds. Though a compromise could be reached this week, the worst case scenario is that Greece would continue to miss debt payments and, eventually, be forced out of the euro currency. Doing so would allow Greece to pursue its own fiscal and monetary policies in pursuit of economic recovery. But what would that mean for investors around the world? The short answer, assuming you have a fairly diversified portfolio of stocks and bonds, is that it probably wouldn't have a dramatic long-term effect. Here's why: If you look at the kind of target-date mutual funds that are popular compenents of many American retirement accounts, like 401(k)s—the Vanguard Target Retirement 2035, for example—about a third of their holdings are in foreign stocks. And of those foreign stocks, only a small fraction tend to be Greek companies. The Vanguard Total International Stock (which the 2035 fund holds), for example, has only about 0.07% of assets in Greek companies. So not a lot of direct impact. The indirect impact is also likely to be muted. More than 45% of the holdings in Vanguard Total International Stock are in European countries—and if Greece leaves the Eurozone, that could affect companies and markets throughout the Continent. But some analysts [are arguing](http://www.marketwatch.com/story/6-ways-investors-can-play-europes-hellenic-headache-2015-06-30) that the market has already reacted, and perhaps even over-reacted, to the possibility of a so-called Grexit. “You have to assume that a substantial amount of the correction is priced in,” Lawrence McDonald, head of U.S. macro strategy at Societe Generale, recently [told MarketWatch](http://www.marketwatch.com/story/6-ways-investors-can-play-europes-hellenic-headache-2015-06-30). That being said, a note of caution ought to be sounded about the dollar. If the Greek crisis isn't resolved quickly, it could lead to a flight to safety away from the euro and toward the U.S. dollar. The dollar's strength has already led to sluggish profit growth in the U.S. In the past few months, the euro has rebounded a bit. But the euro could weaken again if crisis persists in Greece, putting U.S. companies that sell their goods abroad in a tough spot. Still, even if you believe things in Greece will get worse before they get better, [history suggests you'd be unwise](http://money.cnn.com/2015/06/30/investing/stocks-market-greece-crisis/) to pull much of your money from the market right now. Though we could be in for more bad news and some painful market gyrations in the near term, keeping your money invested and sticking to your long-term strategy will likely pay off in the end—no matter what happens in Greece. Plus, there's potentially good news for bond investors: If fear of European instability drives investors to seek out safe assets like U.S. Treasuries, then many bond funds will do well. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/greece-greek-crisis-investor-response/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Economy", "item": "https://money.com/economy/" }, { "@type": "ListItem", "position": 4, "name": "How Investors Should React to the Greek Crisis" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/greece-greek-crisis-investor-response/#webpage", "url": "https://money.com/greece-greek-crisis-investor-response/", "name": "How Investors Should React to the Greek Crisis", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2015-07-01T19:10:03.000Z", "mainEntity": { "@id": "https://money.com/greece-greek-crisis-investor-response/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/greece-greek-crisis-investor-response/#breadcrumb" }, "dateModified": "2024-04-16T06:07:56.000Z" }, { "@type": "Article", "headline": "How Investors Should React to the Greek Crisis", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2015/07/150701_inv_whatgreecemeans.jpg", "width": 2100, "height": 1397, "caption": "150701_INV_WhatGreeceMeans" } ], "author": [ { "@type": "Person", "name": "Susie Poppick", "url": "https://money.com/author/susie-poppick/", "@id": "https://money.com/author/susie-poppick/#author", "image": "https://img.money.com/2014/05/14-05-21_bio_author_poppick.jpg?quality=85&w=190&h=190&crop=1", "email": "susie_poppick@moneymail.com", "sameAs": [ "https://x.com/susiepoppick" ] } ], "publisher": "https://money.com/#organization", "datePublished": "2015-07-01T19:10:03.000Z", "description": "Your retirement accounts probably hold at least some Europeans stocks, but very few are probably Greek companies.", "abstract": "Your retirement accounts probably hold at least some Europeans stocks, but very few are probably Greek companies.", "@id": "https://money.com/greece-greek-crisis-investor-response/", "inLanguage": "en-US", "dateModified": "2024-04-16T06:07:56.000Z", "wordCount": 555, "keywords": [ "funds", "Greece", "Investing", "Retirement", "stocks" ], "about": [ { "@type": "Thing", "name": "Political economy", "sameAs": [ "https://en.wikipedia.org/wiki/Political_economy" ] }, { "@type": "Thing", "name": "Economy", "sameAs": [ "https://en.wikipedia.org/wiki/Economy" ] } ] } ] } ```